Kalispell Council Delays TIF Decision

By Beacon Staff

Funds that have accrued in the West Side Tax Increment Finance District could be on their way to sunsetting after Kalispell city councilors rejected a proposed parking lot project.

At a Dec. 19 meeting, councilors voted 6-2 against a proposal to include a parking lot project at the Gateway West Mall that would have extended the life of the West Side TIF in the Urban Renewal Plan.

Councilors and Mayor Tammi Fisher expressed concern over both the project’s worth and cost. As the deadline to use or lose TIF funds approaches, city staff, namely City Attorney Charles Harball, will now try to find other projects eligible for TIF financing.

The council’s decision to reject a proposed land swap and construction of a 255-space parking lot in place of the old Gateway West Cinema could inadvertently lead to the expiration of the TIF district because staff may not find other suitable projects in time. A project must be in place by March or else an estimated $2 million of TIF monies will sunset, meaning they will flow into the general fund and be distributed to the city, county and school district.

“I’m very, very concerned that our actions tonight may sunset the entire district and eliminate our dreams for the future relative to the tracks, etcetera,” Councilor Jim Atkinson, who voted for the project with Randy Kenyon, said.

Atkinson later added, “We need to have something in the pipeline to act upon prior to the deadline or it all will sunset and we will have egg on our face and a railroad that goes through the middle of town forever.”

The TIF district was established in 1997 to be used for redevelopment, the removal of blight and the creation of jobs. City staff and the Urban Renewal Agency presented the parking lot proposal as a way to meet all three of those objectives at the Gateway West Mall, where the old theater remains closed and unused, Harball said. City Manager Jane Howington estimated the project, all told, would cost between $1 million and $1.5 million. The project would also keep the TIF district alive.

But the cost appeared to outweigh the benefit in most councilors’ minds.

“This is a terrible project, the most waste of money I’ve ever encountered,” Councilor Bob Hafferman said.

“We do as much as we can to try and connect the dots and the excuses and the reasons across the city to be able to keep this TIF district alive,” Councilor Tim Kluesner said, “just so we can use the money to fund other projects that are connected by the dots all the way over the city. Myself and other city residents find that wrong.”

Hafferman, Fisher and others brought up similar properties worth looking at, including a privately owned lot presented by resident Jerry Begg. Begg told councilors a piece of land his family owns on the corner of Glenwood Drive and Husky Street next to the Gateway West Mall could be a better solution to the parking situation near Teletech.

But Howington reminded council members that purchasing private land, particularly Begg’s property that could be commercially developed, goes against past recommendations.

“I have repeatedly heard since I’ve been employed by city, the city is not in the business of purchasing property, owning real estate or competing with the private sector,” she said. “That’s one of the reasons why we introduced the idea of doing the (Gateway West Theater) swap … The movie theater will remain blighted property until it becomes decayed or a public safety hazard.”

Council and the mayor agreed to hold a special meeting requested by Howington for Jan. 4 to discuss projects and the TIF district. New projects would be introduced for consideration at the Jan. 9 council meeting. Howington’s last day as city manager is Jan. 4.

The city council approved the hire of David L. Nielsen as the interim city manager starting in January.

Nielsen, 62, is retiring as the Helena city attorney at the end of December after 15 years.